2025-VIL-1299-MAD-CU
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CUSTOMS High Court Cases

Customs – Under-Valuation, Confiscation of goods, Penalty under Customs Act - Appellant accepted the charge that the design charges for the imported goods should have formed part of the assessable value under the Customs Valuation Rules. An Order-in-Original was passed rejecting the declared value, redetermining the assessable value, confiscating the goods, and imposing a redemption fine and penalty on the appellant - Whether the Dept can confiscate the imported goods merely on account of non-declaration of the value of a portion of the imported goods, which otherwise complied with the tariff entries – HELD - The records clearly indicate the series of errors committed by the assessee in arriving at the proper assessable value. The value reflected in the B/E had been incorrect, and when confronted, the appellant conceded to the error. Subsequent investigations revealed further errors in the valuation of the consignment that also the appellant acceded to. Ultimately the valuation was rejected and the proper assessable value determined by the authorities and accepted by the appellant – Further, The Nil rate is in relation to a separate assessable commodity being ‘plans, drawings and designs’, and cannot be interpolated to mean design charges in respect of the Dryers, Heater and Cooler imported by the assessee, that constitute a distinct, separate assessable commodity - As the value reflected in the Bill of Entry did not correspond to the proper valuation determined by the authorities, the confiscation is valid under Section 111(m) of the Customs Act. The appellant had accepted the errors in valuation and paid the duty as per the enhanced value determined by the Dept. Therefore, Section 111(m) was clearly attracted and the confiscation is justified – The appeal is dismissed - Whether the Department was justified in imposing a redemption fine and penalty as a condition precedent for redeeming the goods, whose importation was otherwise permissible – HELD - The imposition of redemption fine and penalty was justified under Sections 125 and 112(a) of the Customs Act, respectively. Since the appellant had accepted the errors in valuation, the scope for discretion in imposing the penalty was limited.
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